Jyotsna JayaramPartner
Akshaya ParthasarathySenior Associate
Amala GAssociate
Key Developments
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Insurance regulatory authority issues fresh regulations for consumer protection
The Insurance Regulatory and Development Authority of India (IRDAI) has issued the IRDAI (Protection of Policyholders’ Interests, Operations and Allied Matters of Insurers) Regulations, 2024, which came into effect on 1 April 2024, and replaced the extant regulations on this subject.
The key compliances in relation to advertising captured in these regulations include obligations for:
- insurers to publish fair and true advertisements that accurately reflect potential risks in the product offerings and are not misleading. Advertisements must not contain certain kinds of information such as claims that underplay the risk involved or fabricated facts and figures;
- insurers to prominently include their registered name with their trade name or logo while publishing advertisements;
- distribution channels to publish advertisements as merely soliciting insurance products offered by insurers and not give the impression in the advertisement that the products are offered by them directly;
- insurers and distribution channels to ensure that they meet requirements under IRDAI’s regulations including in relation to mandatory disclosure requirements;
- insurers to exercise adequate oversight and control over advertisement activities conducted through their distribution channels;
- advertisements should also avoid:
- making claims or displaying information that affect the decision-making ability of a prospective policyholder on insurance products, making unreasonable claims on the policy’s performance or underplaying the risks involved, and failing to disclose or insufficiently disclose exclusions and limitations of the policy;
- containing illegible text or false facts, figures and features.
These regulations mark a significant step towards comprehensive protection of policyholders, and potential consumers’ interests in the insurance sector.
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Self-declaration requirements being developed for advertisers and advertising agencies
On 7 May 2024, the Supreme Court of India, in an order in Indian Medical Association and Anr. v Union of India (IMA Case), directed advertisers and advertising agencies to submit self-declaration certificates (SDC) before an advertisement is printed, aired or displayed.
Pursuant to the Supreme Court’s order, on 3 June 2024, the Ministry of Information and Broadcasting (MIB) issued a press release requiring such SDCs to be uploaded on designated portals for radio, television, print and digital advertisements. The SDC had to state that the advertisement does not contain misleading claims, complies with applicable regulations and was required to be signed by an authorised representative of the advertiser/advertising agency. Advertisers/advertising agencies were also required to provide proof of uploading the SDC to the respective broadcaster, printer, publisher or electronic media platform. According to the MIB’s press release, all advertisements required a valid SDC to be run. The MIB also issued guidelines on SDC requirements.
On 3 July 2024, the MIB appears to have diluted the scope of the SDC requirements by way of another advisory in supersession of the previous advisory and guidelines. However, the new advisory has not yet been made available on MIB-designated portals. The new advisory requires advertisers/advertising agencies to submit SDCs only for advertisements concerning products and services related to the food and health sectors and only on an annual basis (instead of submitting before issuing an advertisement).
However, the Supreme Court’s directions on SDCs in the IMA case was not limited to food and health related advertisements and required the submission of an SDC for each advertisement issued (instead of annually) by advertisers and advertising agencies.
The Supreme Court issued a subsequent order in this matter on 9 July 2024 directing the MIB to continue churning ideas and conduct further meetings with all the relevant stakeholders to resolve the challenges faced by the industry. The central government requested two weeks' time at the hearing held on 30 July 2024 to submit its recommendations based on the stakeholder meetings held. The next hearing is set for 27 August 2024 and the Court is expected to clarify the scope and validity of the MIB’s SDC requirements.
In the coming months, several critical developments reiterating the government’s continued efforts to regulate the advertising sector, particularly in the digital space, are expected. The outcome of the Supreme Court’s hearing on SDCs is one key example. Further, the Central Consumer Protection Authority has issued draft guidelines to prevent unsolicited commercial communications, adding to the efforts of the telecom regulator in this area.
